Attendees at the National Renderers Association (NRA) Central Region Convention found plenty of issues to address at the group’s annual meeting held in Elkhart Lake, WI, in early June.
First up on the schedule was Joe Jobe, National Biodiesel Board, with a discussion on biodiesel, including its composition, status with the Environmental Protection Agency (EPA), legislative activities, and market opportunities. He said that although diesel engines can be run on pure biodiesel without modification, the primary fuel being produced and used presently is a 20 percent blend of biodiesel and diesel, referred to as B20.
“Why B20?” Jobe asked. “The answer to that is there has been a lot of testing done on B20 and B20 shows that you can get your best environmental benefits for your least amount of incremental costs. In addition to that, at 20 percent blends, B20 is a total drop-in replacement fuel in every engine and every application in fueling delivery equipment.”
According to Jobe, over 200 major fleets are currently using biodiesel nationwide, including all branches of the U.S. military, the U.S. Department of Defense, the National Forest Service, the U.S. Postal Service, state departments of transportation, and public utilities. He stated that biodiesel costs roughly one cent per percent of blend more than regular diesel.
Jobe pointed out that biodiesel is a fully registered and legal fuel with EPA, the fuel has a new standard from the American Society of Testing and Materials, Specification D 6751, and Minnesota has passed legislation that requires a two percent blend of biodiesel no later than June 30, 2005 (see June 2002 Render). He estimated that nationally, 20-25 million gallons of biodiesel would be produced in 2002, up from 15 million in 2001.
“We’re still a very small industry but we’re growing very rapidly,” Jobe stated. Legislation affecting biodiesel is also increasing, including two primary pieces of legislation.
“The first is a renewable standard legislation,” he stated. “[It] will repeal the oxygenate requirement [in reformulated gasoline] and put back in its place a renewable fuels requirement. What it does is it will require the use of renewable fuels in motor fuels. It started out as a two percent requirement and now it is a requirement that would use 2.3 billion gallons by 2004 and ramping up to five billion gallons by 2012.
“Why is that important for biodiesel?” Jobe asked. “Because biodiesel was added to that language and refiners, blenders, and distributors who would be mandated under that requirement could use, would not have to, but could use biodiesel to meet that renewable fuel requirement in diesel if they chose.
“The other significant piece of legislation is the tax incentive legislation,” Jobe continued. “That would provide a partial excise tax exemption for biodiesel similar to the partial excise tax exemption that ethanol has.” He explained that the bill provides a penny per percentage point excise tax exemption for biodiesel, eventually pointing out that the penny excise tax is for soy-based biodiesel; animal fat-based biodiesel only receives a half-cent per percentage tax credit in the legislation.
In wrapping up his presentation, Jobe told attendees he believes the biggest market opportunity for biodiesel will be EPA’s new low sulfur rule, in which the sulfur content in diesel must be reduced from 500 parts per million (ppm) to 15 ppm by 2007. Biodiesel has no sulfur. He further explained that capital investment for biodiesel production is approximately one dollar per gallon of production and that most producers of the alternative fuel are co-operative farmer groups in the Midwest and glycerin producers such as Proctor and Gamble.
Next up was Michael Langenhorst, Anamax Corporation, who began by providing a renderers perspective on biodiesel. He stated that there are three potential sources for biodiesel production: soy oil, yellow grease, and tallow. Langenhorst presented figures showing the gross production costs for the three are: soy oil, $1.73; yellow grease, $1.06; and tallow, $1.49. He continued by stating that after calculating the various government credits/subsidies and the proposed tax credits, net production costs for soy oil actually shows a 75-cent profit, while yellow grease and tallow are still in the red with a 31- and 74-cent cost respectfully.
“You look at all the different subsidies and tax credits, and I think it’s pretty graphic,” Langenhorst stated. “You can see here exactly the discrepancy that’s involved. What we’re going to say [to government regulators] is ‘Listen, we don’t need subsidies, but if there are subsidies or credits out there, let’s make sure that there’s equal footing.’” He also pointed out that the 11 billion pounds of animal fats and oils produced annually account for less than three percent of the diesel fuel market, while the 23 billion pounds of vegetable oils produced account for nearly six percent of the diesel market.
“We’re not going to take all our product and convert it into biodiesel,” Langenhorst said. “So there’s a heck of a marketplace out there and it’s time to quit worrying about what the feedstock is. Feedstock neutrality has to be the main issue.”
Langenhorst then shared a presentation he gave at the American Feed Industry Association convention earlier in the year that provided a brief history of the rendering industry, information on rendered products, and highlights of other topics he felt would help educate feed manufacturers about rendering. He stressed that renderers must have Hazard Analysis and Critical Control Point (HACCP) programs in place.
“This is something that’s going to be promoted throughout the world,” he said.
Langenhorst next addressed the rendering situation in Europe. He stated that every year, between 50 and 75 million tons of meat and bone meal is added to a stockpile of 220 million tons waiting to be incinerated.
“They do not have the capacity to get rid of all the product they’re producing,” Langenhorst said. “There are companies right now that are building incinerators and they’re using it to provide energy for their rendering plants and they’re generating electricity out of it and selling it back to the grid. This is just a totally different industry but not one pound of animal proteins in Europe is being used as animal feed right now.” All but one EU country pays processors or renderers for their product/service, between $40 and $120 a ton to incinerate.
Langenhorst addressed bovine spongiform encephalopathy (BSE), recapping the U.S. actions since the discovery of BSE, including import restrictions, surveillance programs, and voluntary and government issued bans on feeding of meat and bone meal to ruminants. He said two additional actions taken by industry, which includes renderers partaking in third party certification for compliance with the feed ban and beef producers certifying that they are not feeding ruminant protein to cattle, means the United States has a “five firewall protection” system in place.
“The risk of BSE in the United States is extremely low,” Langenhorst stated. He also discussed the recent discovery of chronic wasting disease (CWD) in Wisconsin deer and the role renderers are taking in the animal eradication process.
“The renderers in Wisconsin are going to be working together on this and we are going to try to be part of the solution as opposed to part of the problem,” Langenhorst commented. “Dedicated processing is going to be needed because we will not use this product in animal feed. We will probably use it for energy.”
In conclusion, Langenhorst questioned whether the U.S. rendering industry could become a disposal industry like in Europe.
“It’s something we all have to keep in mind,” he warned. “If we don’t want that, we have to make sure we’re fighting for the right side of the issue.”
Further discussing the CWD issue in Wisconsin was Dr. Robert Ehlenfeldt, Wisconsin Department of Agriculture. He explained the make-up of CWD, which is a transmissible spongiform encephalopathy (TSE) that affects white-tailed, mule, and black-tailed deer, and elk. Currently, the hot spot of CWD is 18,000 square miles in northeast Colorado, southeast Wyoming, and southwest Nebraska. Ehlenfeldt explained that three other areas have become affected this year in white tail deer: Nebraska, Wisconsin, and Saskatchewan, Canada. He addressed the outbreak in Wisconsin, where 18 deer were found infected in a very central area in the southwest area of the state, and the mandatory testing being done in the state that applies to all farm-raised deer and elk and all captive whitetail deer even if they’re moved to another farm. Ehlenfeldt said testing all those animals is a challenge.
“There’s not enough capacity in the U.S. to do tests that we want done in Wisconsin,” he commented. There are only six U.S. labs currently approved to perform testing for CWD. Ehlenfeldt stated officials do not know how CWD is spread, that disposal is a challenge for CWD-positive deer, and there is no evidence that CWD is linked to Creutzfeldt-Jakob disease, a rare human TSE. He recommended, however, that if a deer tests positive for CWD, that it not be eaten as a precautionary measure.
Wrapping up the morning session was a presentation by Kevin Ripp, Aqua Fix, on the company’s new odor control and wastewater treatment products. He explained that Dazzel is a simple product that works similar to a spray air freshener in that it bonds with odor molecules. The all-natural product is heat sensitive, lasts for about one hour in confined spaces, and uses spray nozzles that are easy to operate. Ripp said currently two renderers are utilizing the product and are pleased with the results. The company’s wastewater treatment product is used to stimulate existing bacteria to improve the degradation rate.
After a break for lunch, attendees were treated to an inspirational speech on leadership by former National Football League linebacker Blaise Winter, who played for 11 years with various teams, including the Green Bay Packers.
“Leadership is about excitement,” he began. “It’s about sharing something that will excite.” Winter humorously encouraged audience members to greet people with his new form of communication, the “head butt,” which he eventually demonstrated on a reluctant Central Region President Mike Botehlo. Winter went on to share his life growing up as a boy who had a cleft palette and the actions he took to overcome his disability. He spoke of his determination to play football in college, even though his high school coach told him he wasn’t good enough.
“I came here to inspire, I came here to motivate,” Winter emphasized.
Perception a Threat
The second day of the meeting focused on association activities, including an update from Don Franco, NRA’s Scientific Services director, who warned attendees that the greatest threat to the rendering industry is perception.
“It continues to haunt us,” he stated, giving an example from a recent trip to Honduras. Franco also warned that those rendering companies who do not have a HACCP program in place would need to soon, since the Food and Drug Administration (FDA) is supporting the biosecurity program. He credited the NRA staff for their work with Senator Richard Durbin’s (D-IL) office on a revision to Durbin’s additional feeding ban bill that is more flexible than originally planned.
Tom Cook, NRA president, followed with a summary of the various association activities, such as meetings with government officials at the U.S. Department of Agriculture and FDA to educate them on rendering issues and the benefits and safety of rendered products. Cook believes that one of the real opportunities down the road for renderers is biodiesel, but that the challenge is getting on equal footing with the soy industry on biodiesel definition in government legislation.
Cook also covered EPA issues and NRA’s annual fly-in that was scheduled for June.
Gary Pearl, president, Fats and Proteins Research Foundation (FPRF), took the floor next explaining that the foundation’s research focus is evolving, with more projects focusing on non-feed uses of animal by-products. He thanked the Central Region members for their financial contribution to FPRF that helped with the revamping of the foundation’s Web site.
Pearl next shared an e-mail FPRF received that illustrated Franco’s warning about perception issues. The message was received from a vegetarian who thinks rendering is “one of the most disgusting” industries in the world.
“One of the things we have to promote is all animal production is reliant upon the rendering industry,” Pearl commented. “The alternatives are just not there.” He next discussed the biodiesel industry and his recent trip to China that emphasized swine nutrition.
“China raises five times the number of pigs that we raise here in the United States, almost half a billion hogs,” Pearl stated. “It [the trip] was an opportunity to share animal by-products with a heavy, heavy potential.” He added that not once during his three-and-a-half week journey was he asked a question about Salmonella or heard the term BSE.
The convention finished up with the Central Region’s business meeting, where it was agreed that there is a need to promote the use of rendered products in the fatty acid and soap industries due to the price challenges in international markets from palm products. Botehlo asked members to begin thinking about potential nominees to fill the secretary position next year when officers change and to recommend sites in Minnesota for future meetings.
Next year’s Central Region Convention is scheduled for June 5-8, 2003, in La Crosse, WI.
August 2002 Render